Euro stocks plunge as French lenders tumble; DAX falls 3%

Forexpros - European stock markets were down sharply on Monday, amid mounting concerns over a possible Greek debt default, while shares in French lenders tumbled amid fears of an imminent credit downgrade. During European morning trade, the EURO STOXX 50 plunged 3.8%, France's CAC 40 sank 4%, while Germany's DAX 30 tumbled 3%. German media reported over the weekend that Germany's Finance Ministry was studying the impact of a possible Greek default, including a scenario in which the debt-laden country exited the euro zone and reintroduced the drachma. Adding to investors' nervousness over the region's debt crisis, the Wall Street Journal reported that major French banks could be downgraded by Moody's Investors Service this week because of their exposure to Greek sovereign debt. BNP Paribas shares plunged 11.9%, Societe Generale tumbled 10.2%, while France's third largest bank Credit Agricole dropped 10.3%. Peripheral lenders were also lower, as Greek and Portuguese government bond yields surged to a euro-lifetime high, while Italian and Spanish yields also climbed higher. Shares in Italian banking giant Unicredit retreated 6.5%, rival Intesa Sanpaolo lost 4.15%, while Spanish lenders Banco Santander and BBVA fell 4.2% and 5% respectively. In London, the FTSE 100 dropped 1.5% as shares in lenders came under pressure after the Independent Commission on Banking proposed U.K. financial firms should ring-fence their retail banking units from riskier investment banking operations. The reforms proposed by the ICB could cost U.K. banks between GBP4 billion and GBP7 billion. Barclays shares dropped 3.1%, Lloyds Banking Group fell 2.5%, while shares in Royal Bank of Scotland dropped 1.8%. Raw material producers were also contributed to losses, as the uncertain global economic outlook weighed on earnings prospects for miners and energy explorers. Mining giants BHP Billiton and Rio Tinto fell 1.95% and 2.55% respectively, while oil major British Petroleum saw shares slump 1.3%. Elsewhere, the outlook for U.S. equity markets was sharply lower, tracking losses in global equity markets. The Dow Jones Industrial Average futures pointed to a loss of 1.15%, S&P 500 futures signaled a decline of 1.1%, while the Nasdaq 100 futures indicated a 1.05% drop. Later in the day, Federal Reserve Bank of Dallas President Richard Fisher was to speak on monetary policy in Dallas. His comments will be closely watched for any clues regarding further easing measures. Forexpros - Forexpros offers a diverse set of professional tools for Forex, Futures and CFDs. These include real-time data streams, technical and fundamental analysis by in-house experts, and a widely used economic calendar and Forex News.